Oligopoly

⚫ Derived from the Greek word, “oligo’(few) “polo”(to sell).

⚫ Market dominated by a few large firms, i.e.;
Competition amongst the few.
• Difficult .Competition

Ease of Competition
entry

Products Control over

price

• Same- • Yes
Different
Characteristics of Oligopoly:

⚫Only “few” sellers.

⚫Homogeneous/Differentiated
products.
⚫Imperfect knowledge.
⚫High barriers to entry.
⚫Mutual dependence.
⚫Non price competition.
Price Determination under Oligopoly
(a) If an industry is composed of few firms each
selling identical or homogenous products and having
powerful influence on the total market, the price and
output policy of each is likely to affect the other
appreciably, therefore they will try to promote
collusion.
(b) In case there is product differentiation, an
oligopolist can raise or lower his price without any
fear of losing customers or of immediate reactions
from his rivals. However, keen rivalry among them
may create condition of monopolistic competition.
Types Of Oligopoly

1. Imperfect or Differentiated Oligopoly:

If the firms produce differentiated products, then it
is called differentiated or imperfect oligopoly.For
example, passenger cars, cigarettes or soft drinks.
The goods produced by different firms have their
own distinguishing characteristics, yet all of them
are close substitutes of each other.
2.Pure or Perfect Oligopoly:
If the firms produce homogeneous products, then it is called pure or
perfect oligopoly. Though, it is rare to find pure oligopoly situation, yet,
cement, steel, aluminum and chemicals producing industries approach
pure oligopoly.

There Are Many other Different types of Oligopoly And we have

Explained only 2 of them. Some Other Types Are:

Collusive Oligopoly

Non-collusive Oligopoly
Barriers to entry:

1. Access to suppliers & distributors

2. Cost of entering a market
3. Legal requirements
4. Legal restriction
5. Fear of retaliation
 Examples of oligopoly:
1. Smart Phone Operating Systems: The
smartphone market is similarly
dominated by a handful of companies, the
most powerful two being Google Android
and Apple IOS. Those companies have deep
relationships with the handset providers and
are able to have their system pre – installed
on each phone.
Computer Operating System
New high can become
oligopolies provide
unique products that are supported by an
ecosystem of supporting technology.
Computer operating systems are dominated
by Microsoft’s Windows, Apple’s Mac OS and
the open source Linux operating systems.
These three systems capture close to 100 % of
the computer operating system market due
to their established positions. According to
the StatOwl website.
Some other common examples:

⮚ Airlines
⮚ Supermarkets
⮚ Steel Industry
⮚ Health Insurance, etc………
A Presentation by

. Alvin
. Harish
. Gokulakrishnan